USDT may be stored in a personal wallet, but the final say still rests with its issuer. PSB Chairman Petr Fradkov and A7A5 stablecoin creator warned that Tether, the issuer, is technically capable of blocking tokens at a specific address. According to him, such mechanisms have already been applied, including in relation to assets associated with Russia.
One of the most notable examples occurred in March 2025. Tether froze about 23 million USDT linked to operations of the sanctioned crypto exchange Garantex. That is, the publicly confirmed case did not concern the blocking of ordinary Russians simply due to citizenship, but a specific Russian platform that was under sanctions.
This works on an address-specific basis. Tether tracks specific wallets and can restrict USDT movement once an address is linked to sanctioned individuals, criminal activity, or a law enforcement request. The company has its own wallet blocking policy, which focuses, among other things, on the OFAC sanctions list. Therefore, even self-custody of USDT does not remove the technical possibility of freezing by the issuer.
At the same time, there is no public data on the mass blocking of small personal wallets of Russians solely based on citizenship. The main risk arises where an address can be linked to a sanctioned owner, organization, or suspicious transactions. This differs significantly from a scenario where Tether simply starts disconnecting all users from Russia.
Fradkov also draws attention to another dependency: USDT reserves are largely linked to US government bonds. In his opinion, the technology is new, but the dependence on the dollar financial system and its rules remains. Therefore, PSB is betting on its own digital tools and settlement infrastructure, not tied to USDT.